First Vanadium achieves critical process flow sheet milestone for its Carlin project, paving the way to a PEA

First Vanadium Corp. (TSXV: FVAN) / (OTCQX: FVANF) has a large, near-surface primary vanadium resource (303 million pounds in Indicated category), with a good grade (0.615% V2O5) in the great mining jurisdiction of Nevada. The company has 42.4 M shares outstanding & $1.7M in cash. Its enterprise value (“EV“) [market cap + debt – cash] = $11.3M = US$8.5M (as of August 30th). First Vanadium is fully-funded through delivery of a PEA, expected in Q1 2020. 

The technical team is nothing short of world-class. This is a group with over 400 years’ combined experience. The board, management, retained consultants & technical team’s core competence is in the exploration, permitting, development, construction & operation of projects around the globe. Not only are these professionals good at what they do, they’re passionate about it. {see August corporate presentation}

The Carlin Vanadium project, one of the best in North America

The Carlin Vanadium project sits on 3,608 acres in mining-friendly Elko county, in north-central Nevada, and is surrounded by exceptional infrastructure. It’s road accessible from the towns of Carlin & Elko. Carlin, 7 miles away, is a major rail hub to both coasts. A power line runs within 5 miles of the property. There are nearby mining communities, a skilled workforce, mining services, suppliers & venders, and an airport.

It would be hard to overstate the importance of developing a vanadium project in the U.S., with the President having named V2O5 a “strategic mineral,” and the very significant and growing need for vanadium in steel, the backbone of global growth. Not to mention the emerging Vanadium Redox Flow Battery market.

The U.S. DOE has pledged to streamline and cut red tape from permitting & approval processes. And don’t forget, last year the U.S. Federal tax rate was slashed from 35% to 21%.

The Carlin project is one that I think could be up and running within five years. Especially if permitting & environmental protocols are reset for critical minerals in light of the escalating trade war between the U.S. & China.

A large, near-surface, high-grade resource….

The high-grade, primary vanadium resource at Carlin consists of 303 million pounds V2O5 in the NI 43-101 compliant Indicated category. At a cut-off grade of 0.30%, the Indicated resource (80% of total resource) grades 0.615% V2O5. There’s also 75 million pounds in the Inferred category. Management believes there’s room to grow the resource if or when needed.

On August 7th, First Vanadium announced that ongoing metallurgical test work on samples from the Carlin project resulted in a preliminary process flow sheet delineating extraction & recovery of vanadium as high-quality vanadium pentoxide (V2O5). 

In my view, a very important and necessary milestone has been achieved, at reasonable cost, paving the way for a (fully-funded) PEA in Q1 2020. The fact that management has announced a flow sheet signals their confidence in being able to deliver that they a viable PEA. 

Paul Cowley, President & CEO commented in the press release

The Company is very pleased at achieving this major metallurgical milestone for the project. With a preliminary flow sheet defined, the Company will now initiate Requests for Proposals from qualified engineering firms for a Preliminary Economic Assessment (“PEA“)”

Here’s a summary of the process flow sheet from the press release,

“The flow sheet follows four steps, 1) crushing & grinding, 2) pre-concentration to reduce the volume of feed to the pressure oxidation circuit, 3) acid leach & pressure oxidation to extract vanadium into solution, and 4) solvent extraction to generate a high-value, pure vanadium pentoxide (V2O5 ) flake product.”

Mangement emphasizes that the flow sheet uses conventional, off-the-shelf technology, 

The extraction process uses conventional unit operations (crushing, grinding, flotation, leaching, solid-liquid separation, solvent extraction & ion exchange, precipitation & calcination) and common chemicals (oxygen, sulfuric acid, ammonium carbonate & ammonium sulfate).” 

A lot of the work to date has been aimed at driving capital & operating costs lower through optimization of the flow sheet. An example is the pre-concentration step that captures the bulk of the vanadium in a smaller volume of feed to the autoclave.

This means a smaller autoclave could be constructed, which would be cheaper to build & operate. Importantly, additional test work to refine & optimize the process is expected to lower costs even further, in time for the PEA. 

There are some very smart & talented metallurgists & engineers working on First Vanadium’s flow sheet! {see image below}

Regarding vanadium pricing, I’m not one to predict or forecast. I thought the price would remain close to $15/lb. Still, at the current vanadium pentoxide (China) price of US$8.6/lb., the in-situ value of the Indicated-only portion of the resource (303 million pounds) is ~US$2.6 billion = ~C$3.5 billion. Compare that to First Vanadium’s EV of US$8.5M.

VRBs are coming, VRB technology advances will help a lot

Vincent Sprenkle, a lead researcher at the U.S. DOE’s Pacific Northwest National Laboratory recently said, “Vanadium Redox Flow Battery costs could be lowered by another 50%.” I think that sentiment speaks to the inevitability of additional technological advancements, which will be bullish for the vanadium market, as it will allow for more widespread adoption of utility-scale VRBs outside of China, where VRB projects already have a strong foothold. 

There are hundreds of battery metals juniors out there, vanadium, cobalt, lithium, nickel, graphite; but very few are moving the ball forward as rapidly & prudently as First Vanadium. Moving towards a PEA with the quoted (V2O5) – China – price at US$8.6/lb. signals a strong belief in both the flow sheet and the project.

First Vanadium Corp., (TSXV: FVAN) / (OTCQX: FVANF) with a PEA in hand early next year, a tremendous management, board, technical team & retained consultants and a strong (high-grade primary vanadium) / sizable (303 M pounds Indicated) project, in a top mining jurisdiction, is worth a closer look.

corporate presentation

latest press releases

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